A piece appeared today on the Forbes site outlining 5 reasons why RIM isn’t doomed. Unfortunately, there is only 1 reason on the list I can find that perhaps gives RIM some hope. The other 4, unfortunately, have all kinds of problems.
BB10 Won’t Matter
The first reason in the piece says that “BB10 is a huge step forward”. Technologically, it puts the Blackberry about level with iOS and Android. So yes, it is a technological step forward. The problem, though, is it doesn’t matter. It doesn’t matter for two very simple reasons: apps and content.
The current Blackberry has a minuscule number of apps available, when compared to iOS and Android. It’s staggering. There are about as many apps sold in any given 48-hour period for iOS or Android as there are apps in Blackberry App World. Larger development shops and products with broad reach are selling Blackberry versions of their apps. But there are legions of apps out there that will never appear on Blackberry, even though they sell in the thousands (or more) on iOS, Android or both. Blackberry content is equally lacking. Yes, you can get mainstream stuff like Netflix, but they don’t have an answer to iTunes.
A “better” operating system won’t matter if there aren’t apps to make it useful. Consider the state of the PC market back in the late 1980’s and early 1990’s. In many ways MacOS was technologically superior to Windows. It offered a better user experience, and somewhat better performance. But that didn’t matter. Windows had a catalog of applications that was several orders of magnitude bigger. Why get a Mac, which may have been “better”, if you can’t do anything useful with it? It took nearly two decades before that started to change, but even still, the Mac lags behind the Windows PC, despite being more technologically advanced in many ways. The reason is simple: there is more software available for Windows. People don’t want “better” at the expense of “useful”.
RIM Doesn’t Have The Right CEO
The next point in the article is that RIM’s new CEO, Thorsten Heins, will bring a new culture and that will translate into better products because internal innovation won’t be stifled. I’m not convinced of this. First Heins was the guy in charge of their current lacklustre product line. A truly talented and innovative person would have found a way to sneak something past the so-called “dominant management style” of Lazaridis and Balsillie. While I do believe the pair share in much of the blame, they aren’t the only ones to fault for the current state of Blackberry product. Heins was the guy in charge of it. It doesn’t appear that there was any amazing, magical secretive products waiting in the wings that was crushed by the top dogs. I’ve been the round peg in a square hole (an in a corporate environment that was big on top-down control), and believe me, if you want to make something happen, you can and you will. There just aren’t the stories about “well, I quit because they wouldn’t listen to me” like you can find for other companies where internal innovation is stifled. No ex-RIM team has appeared to show us what they can really do when given some latitude.
I believe that RIM has the product they have because a substantial number of people in the company, starting with Mr. Heins, believes it is right and it is good. They aren’t building the products they are because “they have to”. They are building them because they largely “want to”. Granted, I don’t believe that there is blind and unequivocal unanimity in the company. No corporation has that. But I do believe that people are going along because they honestly think this was the right course of action.
No disrespect to Mr. Heins, but I’m not convinced that an insider and engineer with no demonstrated history imaginative or creative product development is the right person to save the company. RIM’s problem isn’t an engineering problem. It is a product problem, which leads to the next so-called “strength” from the article.
RIM Has No Marketing Skills
The next item on the list says that “RIM will benefit from much better marketing, particularly if it hires a top-notch chief marketing officer.” Take a close look at that sentence. There is a word about halfway through that turns this from a reason why RIM isn’t doomed to a reality statement that things don’t bode well: if. RIM has shown absolutely no talent for marketing or brand building. None. They continue to try to trade on their “solid and reliable” mantra. The whole “tools not toys bit” from a pair of wanna-be music dudes. The pretty girl who claims to write “a thousand e-mails a day” (receive, maybe. Send, I doubt it. 1,000 e-mails in a 14-hour day is 71 e-mails an hour, or over 1 a minute. I suppose if she is doing nothing but reading and writing e-mails, maybe. But to do that and other work? I highly doubt it). Some guy taking pictures of food in a market. Ooo, the Blackberry lets me Tweet, e-mail and take pictures. So does every other smartphone on the friggin’ market. Other than the (truly excellent) built-in keyboard, there is nothing unique to Blackberry about this.
The reality is that RIM has a serious branding issue, to the point where I believe the Blackberry brand is damaged, possibly beyond repair. The other problem RIM has is that any effort to repair the damage will take time. Lots of it. And time is something they may not have. They can’t really get started until they find someone to fill the gaping hole that is the chief marketing officer. Until they get that filled, why would RIM have “better marketing”? They haven’t changed anything. It’s the same people doing the work. If you don’t remake the team, and you don’t change the thinking and you don’t have a plan, why on earth would anything get better?
RIM’s bigger challenge will be to find someone who will take the job. Retrieving the Blackberry brand isn’t a trivial exercise. Whoever takes the job has a huge mountain to climb, but only after they find a way to extricate things from the rather deep hole they are in now. Just getting back to level ground is a staggering amount of work.
My worry is that, even if they find someone good, they will silo them into “just get us better commercials and print ads”. Rebuilding the Blackberry brand is more than putting a new coat of paint on the thing. The branding and marketing needs to be tied directly into the design and functionality of the product. They are in separable. Don’t believe me? Take one look at successes like Apple or Ford. What the product does, how it looks, and how it works tied directly into how the thing is positioned, branded and sold. The iPhone or the iPad aren’t sales juggernauts because they have good commercials. They are successes because the product and how it is marketing and positioned go hand-in-hand.
The Launch of BB10 Won’t Make A Difference
The author’s 4th point is really a repeat of the first, and thus the argument against it is the same: poor choice of apps and content. Let’s face it, people do not buy on tech specs. They buy what they want (and HBR has an interesting view on why this is). They really don’t care which product is faster, bigger, “better” on the spec sheet. They want it because of how it looks, how it works or what it does, and as long as it does what they need, they are satisfied.
The point also implies that RIM will build partnerships with other device makers. How? Why would the top names in the business want to partner with RIM? To get yet another operating system that, other than being supposedly “better”, offers no real benefits? Samsung and HTC already have Android and Windows Phone devices out there. Samsung also has Bada in its stable. Nokia has partnered with Microsoft, so they are off the list. Motorola is (or is about to be, when the deal is finished shortly) a part of Google. There is no benefit for Google or Nokia to helping out RIM. Samsung and HTC don’t need them. Obviously, Apple will have little interest. There is simply no compelling reason why any other manufacturer would partner with RIM and build devices running BB10.
I’m also not sure how BB10 is a “shot in the arm” for Playbook. BB10 changes little for the Playbook. It is essentially the same device with the same problem. And guess what? No one wants them. I can’t put it any plainer than that. Apple sells more iPads in any given 2-week period than RIM has sold Playbooks in an entire year. Amazon sold more Kindle Fires in the first month of it’s release than Playbook sold in the past 12. Samsung sells more Galaxy Tabs, a lot more. There are so many other tablets that sell in substantially greater volume than Playbook. The Playbook is simply not on anyone’s list for tablets.
No Debt and Cash In The Bank Is Good
The fifth and last point is the only one that I can agree with, and the one that gives RIM a small glimmer of hope. Financially, RIM is still in a reasonably strong position. Unfortunately, the position is eroding. Their ability to maintain a profit is in doubt. While their share of the market continues to decline, they do see modest increases in unit sales. But the margins on those sales is slipping as RIM is left to compete largely on price. At some point, the unit sales themselves will drop, and no amount of price-cutting will stop it from getting worse.
The sad part is that RIM had a chance at salvation, but only if they had done some of what they are doing 2-3 years ago. At that point, they still had a reasonably strong brand in Blackberry. They had a solid position in the enterprise market. Had they recruited a CEO that was product and brand-oriented (not an engineer first), and started to push into the consumer market, they had a chance to be one of the top 3, sharing the space with Apple and and the Androids. They would have had to have remained vigilant on the enterprise space, because it was susceptible to inroads by other devices (which has since happened). RIM’s current situation was not inevitable.
Instead, they had their misguided adventure with Playbook, took the enterprise sector for granted and fumbled and bumbled their way in the consumer market trying to trade on that enterprise presence. This is Palm all over again: by the time they finally caught up, it was too little, too late. RIM is treading that same path. They may have finally caught up to their competitors technology, but they are so far behind on all of the other vital pieces that it doesn’t matter.
Any Recovery Will Take A Couple of Years
RIM had better hope they can hang on for a couple of years. Yes, with a rebuilt marketing plan that includes revisiting the products, and someone with imagination and creativity to lead them, RIM could rise again. But it means product that is designed to be sold, and a marketing effort that is hand-in-hand with the product. It means finding a way to attract developers, and building a better relationship with the developer community. Marketing, product and developer relations form 3 pillars to hold up Blackberry. Missing any one of them puts the product and the company in a precarious position. Missing 2 out of the 3 is catastrophic, and right now, all RIM has is (maybe) the product, and even that pillar isn’t exactly robust.
Sadly, the best thing RIM could possibly do in the short term is to abandon their own operating system and adopt Android. It still doesn’t fix their marketing problem, but it gives them a solid foundation to build on, and a ready-made developer community with a healthy ecosystem of apps and content. RIM would need to spend some serious effort to secure Android (given it is one of the least secure mobile operating systems right now), but this is the one partnership that could be of value to Google. RIM truly has a strong grasp when it comes to security, and they are probably the best in the business in that respect.
There is no certainty for RIM, either for resurgence or for obsolescence. They have become irrelevant, but that position could be changed with product, marketing and time. For now, though, the odds for RIM are not good.